July 12, 2012 at 7:14 AM ET
With its “Legalize Love” campaign, Google became the latest in a growing number of companies to publicly take a position in support of gay rights.
Far from being simply feel-good initiatives, these moves are highly calculated, marketing experts say. Companies may be embracing the rainbow, but the motivating color is still green.
The lesbian, gay, bisexual and transgender community is a huge market with buying power of some $790 billion annually in the U.S. alone, according to Witeck Communications. And gays have influence among the straight consumers who are their friends and relatives.
For many marketers, that is too much to leave lying on the table, even if they risk some backlash from consumers opposed to expanding gay rights. Companies “have to satisfy shareholders at the end of the day,” said Bob Witeck, founder and president of Witeck Communications.
Google’s campaign, announced last week, comes on the heels of Mother’s and Father's Day promotions by J.C. Penney featuring same-sex parents, a Gap ad featuring a male Broadway performer and his boyfriend, and Target selling t-shirts as a fundraiser for the Family Equality Council, a group lobbying against a same-sex marriage ban in the retailer’s home state of Minnesota.
Last November, four dozen companies ranging from Nike to Microsoft signed a statement essentially supporting gay marriage by objecting to the Defense of Marriage Act. In February, Goldman Sachs CEO Lloyd Blankfein participated in a Human Rights Campaign web video in support of marriage equality. “There’s no doubt that American businesses will be central to the dismantling of DOMA,” Human Rights Campaign president Joe Solmonese told Politico last month.
Although gay marriage is a hot-button issue, the gay-friendly corporate moves range widely. Google's campaign, for instance, is aimed at pushing foreign governments to do away with laws that allow discrimination and criminalize same-sex activities.
Others focus on the boardroom. The CEO of Ernst & Young, a Legalize Love partner recently said he will use his position on the board of directors of the Boy Scouts of America to try to make the group more inclusive. The Boy Scouts forbid openly gay people from serving as troop leaders.
Companies also are marketing, in a sense, to their own workers.
A growing number of America's largest companies have policies that guarantee equal treatment and benefits for LGBT employees, according to Human Rights Campaign, which tracks the issue in an annual index. A recent survey by Out Now Consulting in association with Gay Ad Network found that 80 percent of respondents said it was either very or somewhat important to them that a prospective employer have an equality and diversity policy. In industries like technology, where competition for top talent is fierce, the perception that a company is unfriendly to gays can be a competitive disadvantage.
Out Now's survey found that gay-themed ads in mainstream media have a powerful impact. Companies are learning that leaving the safety of niche publications and channels for the exposure of mainstream media can grab attention and potentially cultivate loyalty.
In some case, this loyalty even trumps price. A Harris Interactive survey of LGBT consumers conducted in conjunction with Witeck's firm last year found that 71 percent are likely to remain loyal to a brand they believe to be gay-friendly "even when less friendly companies may offer lower prices or be more convenient."
The stakes are higher than the gay market, said Ian Johnson, founder and CEO of Out Now Consulting. Views on issues like gay marriage have become, for many consumers, a litmus test of a company's moral compass in a cynical marketplace.
"They’re not just marketing to the 15 million Americans who identify as gay or lesbian," Johnson said. "They’re marketing to the millions of peole who support their work colleagues, their friends, their family."
In particular, companies are after the approval of younger Americans, who tend to support gay marriage and equal rights for LGBT people in higher numbers than their parents.
"As America is aging and Gen X and Y are moving into middle maangement, this is the core market," Johnson said. "It is a very strong statement for brand positioning," especially for consumer-facing retailers like J.C. Penney, he said.
Companies typically seek to avoid conflict, but today's post-Occupy Wall Street, post-Madoff culture has forced them to evolve: People are cynical and don't trust businesses, and with the growing rhetoric over same-sex issues, silence is perceived as unsupportive.
"Any signal that leadership is waffling on their core beliefs is a problem," Witeck said. "Companies today are being judged by a lot of executive behaviors... this is one where I think they earn reputation capital."
Consumers perceive a company taking a stand as a mark of integrity, Witeck said. "There’s a halo effect. Whether or not you have strong or no or negative feelings about gay issues, you still want to hear leaders stand up for what they believe in."
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